How to Milk Shares of Starbucks

Sell covered calls on the coffee retailer in anticipation that the stock stalls.

Traders are selling call options on Starbucks in anticipation the stock barely budges in reaction to third-quarter earnings.

With put and call prices elevated before the July 26 earnings report, and Starbucks (ticker: SBUX) stock stuck in a narrow trading range around $52, traders are selling bullish calls in anticipation the stock remains in a rut when earnings are released.